MasterCard has become the latest entrant in the increasingly competitive mobile wallet (m-wallet) market with its unveiling of PayPass Wallet Services, which will be fully rolled out in Q3 2012 in the US, UK, Canada and Australia, with other nations to follow.
MasterCard’s PayPass digital wallet network allows users to store their credit cards on their smartphones, tablets or laptop devices, across all operating platforms, and make purchases online or in stores.
American Airlines and Barnes & Noble will be among the first merchants to incorporate the PayPass checkout button onto their websites, and American will also integrate the PayPass Wallet into its mobile app, which should enable speedy booking and boarding too.
Other partners include financial institutions, such Bank of Montreal, Commonwealth Bank, Citibank, Fifth Third Bank, National Bank of Canada and RBS Citizens Financial Group, plus many more. MasterCard is also working with a number of technology partners to bring its solution to market, including Apriva, C-SAM, Digital River, Intel, Kony Solutions, Local Offer Network, mFoundry and Moneris Solutions.
The new MasterCard PayPass m-wallet launch joins the retail focused Google wallet and O2 wallet in the UK, among many other recent launches, including Western Union’s business focused wallet. The m-wallet arena was also a key topic of conversation at the recent Mobey Day conference in Barcelona, Spain, and the Mobile World Congress.
According to David Bellinger, a certified treasury professional (CTP) and director of payments at the Association of Financial Professionals (AFP) trade body, it is interesting to note that MasterCard has negotiated partnerships with Google, Isis and others ahead of its PayPass m-wallet launch. “The new MasterCard wallet is obviously just one of a series of bets the card network is making on mobile commerce,” he said. “In fact all the card networks are making big bets in this space, including acquiring companies with niche services and capabilities, in order to help them extend their market power from card transactions into mobile commerce. M-commerce covers mobile marketing, loyalty schemes with rich customer datasets and promotions, which immediately precede payments.”
“This diversification strategy seems like a smart approach given how early we are in the development of this market opportunity. Even as wallets like Google’s start to fade, others like Isis may ascend. It’s exciting to think about who will win out in the end. Let’s hope the regulators recognise this development, showing restraint while letting innovation occur under their watchful eyes.”
MasterCard’s new mobile wallet has three distinct components:
• The PayPass Acceptance Network (PayPass Online and PayPass Contactless terminals) allow merchants to accept payments across multiple channels, whether in-store through near field communication (NFC) technology or online via the web. The online services do not require the user to enter detailed card information with every purchase and contactless NFC payments under a certain limit, usually around EUR20, do not require a PIN number either.
• The PayPass Wallet allows users to store payment and shipping information into one location. Visa, American Express, Discover and other card brands can be stored.
• The PayPass application programming interface (API) enables partners to connect to the PayPass Acceptance Network and use MasterCard’s check-out, fraud detection and authentication services. Customers are also allowed to make purchases wherever PayPass is accepted in stores or even on transportation systems in some countries.
By Andrew Deichler.